Bitcoin miners get more difficult than ever: what does this mean?

The level of difficulty of MINEN OF BITCOIN (BTC) has reached a new record. This makes it increasingly difficult for miners to find transaction blocks, although most miners remain profitable as long as the price of BTC is high. What can we expect now?

New records for difficulty and hashrate

The mining difficulty rate has risen to 142.3 trillion, an increase of 29.6 percent since the beginning of this year. This value indicates how many calculations miners have to perform on average to find a transaction block. Every 2,016 blocks automatically adjusts the Bitcoin network this parameter, so that the block time always stays around ten minutes.

At the same time, the hashrate, the total computing power of the network, has risen to 1.09 ZH/s. That amounts to a total of more than one trillion calculations per second. According to CJ Burnett, Chief Revenue Officer at Compass Mining, this shows how robust the network is:

“The automatic adjustment of the level of difficulty is one of Bitcoin’s most elegant and undervalued properties. It enables the network to rider itself, almost as if it is a living organism that regulates itself.”

Competition among Miners is increasing

The rising level of difficulty increases competition within the mining sector. Less efficient miners are often forced to stop their activities, while large parties with cheap energy and modern equipment are actually strengthening their position.

Although higher difficulty can reduce margins, the impact remains limited as long as the price of BTC rises. Alex de Vries, founder of Digiconomist, also points to the role of technological progress:

“As new generations of mining equipment are used, the amount of electricity that is used for each respect falls. That means that the relationship between hashrate and energy consumption is only indirect.”

A higher level of difficulty also strengthens the safety of the network. The more computing power is needed to find blocks, the more difficult a theoretical 51 percent attack becomes. Burnett summarizes it:

“As hashpower and difficulty grow, the network becomes safer and more difficult to attack.”